Balfour boss ‘embarrassed’ if margin doesn’t double

Balfour Beatty chief executive Leo Quinn has said he would be “embarrassed” if the company does not double its roughly 2 per cent margin “in the current environment”. 

Speaking on The Investor Download Podcast, published by asset manager Schroders, Quinn also said the UK’s largest contractor is undervalued given major forthcoming public infrastructure investment and changes to its contracting style. 

“Shareholders look at the company [but] I don’t really think they fully appreciate or understand the value,” he said. “We have a decade of infrastructure growth which we’re going to capitalise on and remember: we are the biggest player in that market.”

Quinn added: “If you look at energy security, you look at transportation, you look at defence security, we’re sort of front and centre and, of course, within all of that you’ve got this nuclear component.”

“We make a 2 per cent margin. I can’t give you a forecast, but I’d be embarrassed if we couldn’t double that in the current environment given the way that our order book over time has changed. 

“[It has changed] from a hard bid, fixed-price, lump-sum type of market to a two-phase, whereby you actually work with the client to do the initial specification and costings and then you commit to a price after you’ve done all of the engineering and the research.” 

Quinn also said Balfour Beatty has been undertaking major share buyback programmes, as it is an efficient way to return value to shareholders when, as he believes, the shares are undervalued. 

“We [will have] bought back half our market capitalisation by the end of 2025. The only thing that we’ve done wrong is we should have bought the company personally, three years ago, and benefited from that,” he said. 

The podcast comments came days before the 67-year-old executive bought shares in Balfour Beatty worth £129,696. 

On Friday (21 June) Quinn purchased 37,148 shares for £3.49 each via the London Stock Exchange, according to a regulatory notice published by Balfour. 

However, the purchase came 38 days after Quinn sold 189,921 shares at a higher price – £3.85 – on 15 May for a combined £730,421. Balfour Beatty’s share price fell by 6.05 per cent between Quinn selling and buying shares, although it has risen by 8.88 per cent in total over the past six months. 

The group has seen its share price rise by around 46 per cent since June 2015, when Quinn rejoined as chief executive. Quinn had earlier started his career as a graduate trainee at Balfour Beatty. 

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